Finance, Financial Accounting and Management Accounting


Atrill & McLaney (2008) describe Finance (also referred to as financial management) as being something likened to accounting rather than accounting itself. Atrill & McLaney (2008) go on to describe finance as existing to aid decision makers on how to plan a business, by assessing the needs of the business and organising the finances to suit these needs (being simply to make investments for good returns, or additionally numerous other arenas where financial needs must be assessed).

Financial Accounting

Atrill and McLaney (2008) outline Financial Accounting quite thoroughly and it can be summarised as the following: Financial Accounting is predominantly produced to summarise the overall financial standing of a business in a formal, regulatory defined format for public view (eg: investors/potential investors, governments, general employees, suppliers, competitors etc.). Financial accounts are usually prepared out of necessity once (in some cases twice) per year and are often a requirement by many countries tax laws.

Management Accounting

Atrill and McLaney (2008) describe how, as the name suggests, this form of accounting is used by management in a company and are often used to aid in specific decision making requirements (such as new purchases, new investments, etc.). Management accounts are mostly tailor-made both in format and in financial area to best suit the requirements of the specific manager and specific task at hand.

Similarities and Differences

Finance itself is a broader outline of the processes involving finance in a business, which is arguably the most important aspect of a business. Finance itself would encapsulate the latter two of the above definitions.

As described above, Financial Accounting provides predefined forecast on how a business has been running, financially, in the past period; which, as Atrill & McLaney (2008) point out, can also be used to forecast future performance. Management Accounting is predominantly used for projections or forecasts on new ventures or current ventures that a business is partaking in and are generated if and when they are required by management, rather than at predefined times as required by regulatory bodies.

To conclude, “management accounting seeks to meet the needs of the business managers and financial accounting seeks to meet the needs of the other user groups” (Atrill & McLaney, 2008).


Atrill, P. & McLaney, E. (2008) Accounting and Finance for Non-Specialists. 6th Edition. Financial Times Press.

Should an Organisational Strategy intertwine itself with the Human Resources Policy?

With regards to the argument of whether organisational strategy should or should not be intertwined with the human resources policy, I believe that it should be.

As written in by Buchanan and Huczynski (2010), people form an organisation, even down to the organisations “personality” – while the organisational strategy may seem on the surface to be more along the lines of the organisations ideal vision and mission, this is the weight the employees must take on their shoulders and human resource policies should be structured to align the real world, daily function of the organisation to achieve the ideals specified in the strategy.

HRM Guide (n.d.) states “organisations can be regarded as people management systems” as well as “Human resource managers can encourage organisations to adopt strategies (for their structures) which foster both cost-effectiveness and employee commitment”. Particularly important, is the employee commitment that HRM Guide has pointed out, without the full commitment and belief of the employees in the organisation and its strategy, the organisation is going to find it difficult to implement the strategy and the values.

HR-Info (n.d.) explains how “people management professionals” have the role of becoming knowledgeable about an organisation but are often discouraged by jargon and complexity, following this comment we can assume that if the management professionals are discouraged by the complexity of the strategy then most of the employees will be too. It is the job of the management professionals (specifically HR), to, as HR-Info puts it, “demystify” the organisational strategy for the employees and it should be an important part of the HR policy to explain the details behind the organisational strategy.

I also feel that, from my experience, if an employee has full understanding of the goals and vision of an organization – they will perform better and also feel more part of the organisation. Many employees are unaware of the strategy behind an organisation or feel detached from it due to the “higher level” overview carried across in vision and mission statements. If organisational structures are evaluated against internal staff policies this will aide in a more unified vision and understanding in an organisation.

To conclude, it is my view that the vision and mission of an organisation, therefore, should be simplified with regards to the use of jargon and structured in a clear manner which considers the employees of the organisation. Upper management and/or directors of an organization should consult with the HR department when developing, or redeveloping their organisational structure, perhaps to the point where the HR department drafts the organisational structure based on initial instruction of the upper management/directors. Without consultation, organizations run the risk of losing the link between upper management goals and employee participation which make up the day-to-day life of the organisation. Without the alignment of these two, it is difficult to imagine the fruition of the strategy behind the organisation.


Buchanan, A. & Huczynski, A. (2010) Organizational Behavior. 7th Edition. Upper Saddle River: Prentice Hall.

HR-Info (n.d.) Demystifying Organizational Strategy [Online]. Available from: (Accessed: 20 March 2011).

HRM Guide (n.d.) Organizational Structure [Online]. Available from: (Accessed: 20 March 2011).

IT Positions in South Africa, do they require tertiary education?

In South Africa, there is a strong emphasis on experience when it comes to technical or IT positions. IT job ads in South Africa are generally opened up with a requirement of “IT related Degree or Diploma” but, in my experiences of being an applicant without a degree (only a 1-year Comp Sci. diploma) as well as being in the position of hiring applicants, this is often just a small benefit when it comes to the final choice. In the interviews I have taken part in I have never had an in depth discussion about the qualifications either I myself have or an applicant that I am interviewing has.

In this (IT) industry in South Africa, it’s a known fact that for technical positions (programmers, technicians etc.), salary is almost solely based on the amount of experience an applicant has.

Another point I found when being an applicant with a diploma is that the difference between a 1 diploma and a 3 year degree is quite vast. Not exactly 2 years ahead due to degrees generally being spread out with a lot of holidays and the 1 year diplomas being 48 out of the 52 weeks in the year, but still a very significant amount more learning is gained in the degree program. Yet, job ads were looking for “either a degree or diploma”.

I do keep up to date with job postings for IT related positions in my country and I have found that recently, a number of jobs are asking for a “3 year degree” rather than simply a degree or diploma.

For positions in management, which mainly consist of project manager positions, project management training has always been a requirement in my experience of reading through positions, but along with that comes a requirement of, generally, a minimum of 3 years of experience in project management.

This brings me to the catch-22 of the job market in South Africa that I found in my first 2 years of being in the industry. Practically nobody will even interview you without relevant experience, let alone hire you. Without experience you cannot get a job, and without a job you most certainly can’t get (valuable) experience.

I feel the main area where specific training is not a major requirement is in the field of IT support. Many positions are available in support and most of them involve being trained in the specific scenarios of the organisation on the job. Even with regards to hardware support, I find the most talented hardware support people have learned themselves. The courses such as the A+ and other technical courses, which I have done personally, are almost trivial to someone who has “played around” with computers for a few years. In my opinion, it is difficult to teach such an area as the reasons behind hardware/software failing are not standard, they require trial and error even for the experienced hardware technician.

For technical positions, I have always, and my colleagues in the industry, been given mini-projects to complete and/or written general tests. Personally I give applicants a mini-project as I do not believe that written tests are a good when it comes to programming, specifically. Knowing functions off by heart doesn’t mean much, as generally we all have access to the internet to solve these issues, rather the ability to solve a problem and produce a project with good quality code.

To conclude, the situation in South Africa has become more focused on pre-trained individuals over the years – but this is generally just an initial prerequisite to avoid interviewing potentially mis-fit applicants. The strongest focus does still lie on experience in the specific field that is being applied for. 

Competitors are not enemies

A competitor can be defined as “Any person or entity which is a rival against another. In business, a company in the same industry or a similar industry which offers a similar product or service.” (, n.d.). The word compete brings to mind some form of an enemy who is there to defeat you or to be defeated by you. In the business world, as we can see by’s definition above, it’s not a far stretch to come to the conclusion that competitors can be beneficial to both sides of the collaboration if they choose to be involved with one another.

Many companies, as with people, have different areas in which their talents shine. If we refer to Hamel, Doz and Prahalad (1988) they refer to General Motors buying cars and components from Korea’s Daewoo and Siemens buying computers from Fujitsu. Their article describes particularly the skill of the Japanese manufacturers with the American capability for distribution. Also, they go on to make quite a valid point, in fact these collaborations are, most of the time, complex outsource arrangements.

In the industry I am working in, there is a vast amount of collaboration between competitors, without which I don’t believe the industry would be able to produce the level of advanced systems that they are currently producing.

To put it in to terms of the web development industry, which is the industry I am involved in, I deal with competitors almost daily. If a client comes to me and wants an aesthetically pleasing extranet or intranet system for their company I will outsource the design to my outsource partners who, themselves also offer development services. Once the designs are mocked up I will then outsource the conversion of the design images in to xHTML with my front-end scripting partners and then I will do the system programming in-house. The same situation goes the other way, many of my clients are web development agencies that outsource the more complex programming requirements to myself.

The cohesion this brings to the industry is great, allowing all the different vendors deliver top class products without losing focus on their specific specialisations. In my past positions working for different companies, the benefits of this arrangement opposed to keeping full staff to cover all aspects of development and design is quite high. Unfortunately the high turnover rate when keeping staff and the budget required to employ all the different specialised staff full time is not always feasible.

We can see other examples of collaboration amongst mobile platform development companies. Particularly with Google’s introduction of Android Operating System which was predominantly released to HTC phones, but has now spread across to other manufacturers, including Samsung. Nokia have also recently (at the time of writing this article) made a controversial partnership with Microsoft to supply the operating systems for their phones and to scrap their own Symbian Operating System.

With the ever expanding software and hardware world the opportunities for outsourcing and mutually beneficial arrangements with competitors is growing. As we can see by reading Hamel, Doz and Prahalad’s 1988 paper, most of the partnerships are still happening today, which goes to show that a business should always consider their options with competitor partnerships.

References (n.d.) Competitor definition [Online]. Available from: (Accessed: 13 March 2011).

Hamel, G., Doz, Y. & Prahalad C. (1988) Collaborate with your competitors – and Win [Online] Harvard Business Review. Available from: (Accessed: 13 March 2011).